The Dangers of using Social Media

Think before you type – Social media can land you in Hot Water!

by Sharon Givoni

A recent legal stoush between two well-known Australian swimwear labels over photographs and comments posted on Facebook serves as an important reminder to people in business of the dangers of using social media when making comments about other businesses. What happened in the case?

Leah Madden is Principal of White Sands. She discovered what she thought to be a “rip off” of some items in her 2009 “Shipwrecked” swimwear collection. She posted an album on her Facebook page entitled “The most sincere form of flattery?”. The postings featured several side-by-side comparison shots of models wearing White Sands and Seafolly swimwear respectively and below the images Madden inserted descriptions such as: “White Sands 2009-Seafolly 2010”. She embellished the images with comments such as:

“Seriously, almost an entire line-line ripoff of my Shipwrecked collection.”

“I know, the buyer from ‘sunburn’ (who, as it turns out, works for seafolly) Came to my suite at RAFW and photographed every one of these styles.”

“Ripping off is always going to happen, but sending in a dummy ‘buyer’ to get photos is super sneaky!”

The response

The Facebook statements were read by many people, and elicited quite a response. People said:

“Nasty! Shame on ’em! Won’t be buying Seafolly. WHITESANDS all the way. X”

“Seafolly own everything! Sunburn, miraclesuit and gottex and they used to own jets but sold it recently! And unfortunately they do rip off everyone, they have copied a design 2 chillies has been doing for years! A little frilly triangle, its so bad!”

“Disgusting! How people look at themselves in the mirror is beyond me.”

Media Attention

Madden then sent emails to media outlets also using the same words “The most sincere form of flattery?” in the subject line of each email.

Responses from readers included

“This sort of thing is happening ALL the time. Large corporations no longer have ‘designers’ but ‘product developers’ that source indie designs, copy and mass produce them.”

“Yeah right Seafolly – you really expect us to believe this garbage?…”

What did Seafolly do? In response, Seafolly circulated a press release heavily denying the allegations of copying. It was able to show that it had already had the designs in the marketplace before White Sands. White Sands responded by stating that it had never specifically accused Seafolly of plagiarism.

However, from Seafolly’s perspective the allegation of copying was clearly implied. It needed to set the matter straight and it issued legal proceedings in the Federal Court of Australia. Seafolly alleged:

Misleading and deceptive conduct (in relation to Madden’s emails to the press)

Injurious falsehood (namely, that Madden’s comments and posts had caused damage to Seafolly’s reputation and thus economic loss) and

Madden argued that she had only expressed an “opinion” – not a statement of fact so it should have been alright. The judge disagreed. Madden also argued that she was not making the comments in “trade and commerce” so the misleading and deceptive provisions did not apply. Again, the judge disagreed as the setting was clearly in a competitive context. He found that Madden’s comments were “a serious assault on Seafolly’s business integrity”.

Seafolly’s CEO agreed (of course!). He commented that in “this day of internet, where things go viral” once things are released into the “public space, no amount of logical reasoning actually matters”. “…Once she put that up there, I was finished anyway… the damage had been done.”

No winners

Ultimately Seafolly succeeded in its arguments concerning misleading and deceptive conduct. White Sands was ordered by the court to pay Seafolly damages in the sum of $25,000 and Seafolly’s costs of the court application.

However, in reality, no-one really won. The public airing of their “catfight”, led to both companies attracting some level of negative publicity. One headline state: “Swimwear designer ‘malicious’ against rival” and, “Court slams small designer for falsely accusing bikini maker Seafolly of ripping her off.”

Tips for commenting in Social Media

Think before you speak (or at least think before you type, especially when it comes to social media).

Just because you do not expressly say something, if you imply it, that can be just as bad, legally speaking.

Posting things on social media sites may be considered “in trade and commerce”, especially if you mention your competitors and could be deemed misleading.

Disclaimer – The contents of this article do not replace tailored legal advice

*Sharon Givoni is an intellectual property lawyer with 16 years and has clients across all industries.